If you keep spending more than you take in, you’ll go broke. Who knew? From John Aldan Byrne at nypost.com:
New York City is careening closer to all-out financial bankruptcy for the first time since Mayor Abraham Beame ran the city more than 40 years ago, experts say.
As tax-fleeced businesses and individuals flee en masse, and city public spending surges into the stratosphere, financial analysts say Gotham is perilously near total fiscal disaster.
Long-term debt is now more than $81,100 per household, and Mayor de Blasio is ramping up to spend as much as $3 billion more in the new budget than the current $89.2 billion.
“The city is running a deficit and could be in a real difficult spot if we had a recession, or a further flight of individuals because of tax reform,” said Milton Ezrati, chief economist of Vested.
“New York is already in a difficult financial spot, but it would be in an impossible situation if we had any kind of setback.”
De Blasio has detailed $750 million in savings for the preliminary fiscal 2020 budget, but that won’t be enough to stave off a bloodbath if New York’s economy is hit by financial shocks — including a recession, which some see on the horizon — analysts warn. Gov. Cuomo’s preliminary budget has $600 million in city cuts in the coming year.
But city spending, up some 32 percent since de Blasio took office — triple the rate of inflation — may need to be cut deeper, these analysts add. The city’s long-term pension obligations have escalated, as well, as its workforce has soared by more than 33,000 in the last five years.
Other startling indicators:
- New York state — and city — are ranked No. 1 nationwide in state and local tax burden.
- Property taxes, almost half of the city’s revenue, is rising faster than any other revenue source — squeezing businesses and forcing homeowners, already hit by federal property tax deduction changes, to relocate to lower-tax states.
- The top 1 percent of New York City earners pay some 50 percent of Big Apple income tax revenue.
“New York City could go bankrupt, absolutely,” said Peter C. Earle, an economist at the American Institute for Economic Research.
“In that case, the city would get temporary protection from its creditors, but it would be very difficult for the city to take on new debt.”
As SLL has been saying for at least a decade, a central bank exchanging its fiat debt for a government’s fiat debt is not an economic strategy, it’s a fingers-crossed wish and prayer that ultimately does more harm than good. From Tom Luongo at tomluongo.com:
“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”
— MARIO DRAGHI JULY 26TH 2012
No quote better defines Mario Draghi’s seven-plus years as the President of the European Central Bank than that quote. Draghi has thrown literally everything at the deflationary spiral the Euro-zone is in to no avail.
What has been enough has been nothing more than a holding pattern.
And after more than six years of the market believing Draghi’s words, after all of the alphabet soup programs — ESM, LTRO, TLTRO, OMB, ZOMG, BBQSAUCE — Draghi finally made chumps out of traders yesterday.
Draghi reversed himself after December’s overly hawkish statement in grand fashion but none dare call it capitulation. For years he has patched together a flawed euro papering over cracks with enough liquidity spackle to hide the deepest cracks.
The Ponzi scheme needs to be maintained just a little while longer.
How much longer will the middle class politely tolerate its own destruction?
A middle class that outnumbers the combined poor and aristocracy is a relatively new phenomenon, dating back to around 1900. The rise of the middle class was the result of Industrial Revolution capitalism. It has been one of the most significant and epochal developments in history, yet the intellectual reaction for the most part has been to either ignore it or treat it with disdain. Now the project to destroy the middle class is well under way, with unpredictable and uncontrollable consequences that promise to be just as epochal as its creation.
Intellectual condescension towards the middle class is so common it’s a cliché. What’s rare are attempts to go back in history and see things through the perspectives of that despised group and its progenitors, the poor.
In 1800, virtually everyone was poor, living under conditions of deprivation and grinding poverty. Even being wealthy was no picnic; present-day poverty-line Americans live better. Life expectancy was an estimated twenty-nine years. Farming, the occupation of most, was dangerous, backbreaking labor from dawn to dusk. Most of those so engaged eked out a tenuous subsistence. There was no electricity, no running water, primitive sanitation and health care, and none of the machinery, gadgets, and appliances we take for granted. Only a few wealthy poets who didn’t have to wrest a living from nature waxed euphoric about its “joys.”
As the nineteenth century progressed, primitive factories, mostly in cities, began producing goods of better quality, in more quantity, and at lower cost than had been possible by artisans handcrafting their wares. No doubt conditions in those factories were abysmal—long hours, pittance pay, child labor, dangerous and filthy conditions, and horrible accidents and injuries. All that has been well-chronicled and dramatized, but an important point gets overlooked. Bad as they were, the factories were a better option for those who worked in them than the farms from whence many of them came, or they would have stayed there.
Jim Quinn explores the hell-hole that much of Philadelphia has become under decades of the Democrats’ misrule. From Quinn at theburningplatform.com:
“If you have been voting for politicians who promise to give you goodies at someone else’s expense, then you have no right to complain when they take your money and give it to someone else, including themselves.” ― Thomas Sowell
“The fact that so many successful politicians are such shameless liars is not only a reflection on them, it is also a reflection on us. When the people want the impossible, only liars can satisfy.” ― Thomas Sowell
My original title for this article was going to be 30 Blocks of Potholes, Shitholes, and Assholes, but I didn’t want to offend the sensibilities of my highbrow readership. The trigger for that title was my morning commute on 34th Street in West Philly near the Philadelphia Zoo. This extremely well-traveled four lane highway resembles a moonscape of craters capable of blowing a tire (which I did a few years ago while turning onto Girard Avenue).
As I swerved through this obstacle course of government incompetence, I reflected upon how Philadelphia was a real shithole city run by Democrat asshole politicians (those not in prison yet). I’ve written dozens of articles about the 30 Blocks of Squalor over the last decade and one thing remains constant – West Philly is still a shithole, occupied by low income, low IQ, low morality, welfare state slaves who continue to vote for the same assholes who have enslaved them in squalor.
Most Americans have no idea how bad things are getting in the UK. From Simon Black at sovereignman.com:
The events that I am about to describe to you are 100% true.
They have already happened to various people across the United Kingdom, which in some respects is leading the charge to 21st century “Big Brother” authoritarianism.
It’s all real, and it’s all disturbing. To humanize it a little bit we have pulled several true events together into a single story about a man we’ll call “George.”
George thinks he might stop by the community garden. His neighbors regularly gather there around a waist-deep, inflatable pool they purchased to beat the summer heat.
But then he remembers that the landlords ordered the pool removed… they were concerned that a burglar might inadvertently hurt himself while attempting to rob a home, so the pool needed to go.
Instead George figures he’ll get a start on some errands. He hops in his work van and stops for a bite to eat on the way into town.
But when George’s meat-lovers pizza arrives, it looks quite sparse and smaller than he remembers.
“Public Health England has new standards we’re following,” the man behind the counter explains. “We’ve cut the meat and reduced the size… it’s to combat childhood obesity.”
Well I’m not a child, George thinks, but politely keeps it to himself.
George parks downtown, and still feeling a bit peckish, throws away the empty pizza box in the trash bag in the back of his van.
Daisy Luther explodes some popular fantasies held by people who haven’t prepped but think they can survive in a SHTF situation. From Luther at theorganicprepper:
When it hits the fan…I mean REALLY hits the fan in a permanent kind of way, the most likely outcome is death.
That’s not pretty, and I’m well aware of it. I always try to be positive and optimistic, because for me, preparedness is the ultimate act of optimism, but sometimes we have to look at the numbers and face some things that are pretty terrifying. The first reality check is that some research says that only 3 million Americans are preppers. That means that 315 million Americans are not preppers. Some experts predict that within 30 days of the power going out, 50% of Americans will be dead. Within a year, an astounding 90% of the population will be dead.
Do you want to survive such a scenario? Do you want your children to survive? When you read this information, you have to realize that it’s very unlikely that you and your family would live through a grid failure of a year or more unless you are proactive and develop a preparedness plan that takes all of these causes of death into consideration.
Posted in Collapse
Because history is mostly a series of disasters punctuated by occasional progress, it’s a good bet that we’re in for a replay of prior disasters. From Christ Marenson at peakprosperity.com:
It’s said that truth mirrors fiction. I’m finding this to be the case more and more these days.
Take the 1993 comedy Groundhog Day. Bill Murray wakes up each day to relieve the exact same daily circumstances and interpersonal interactions. He relives the same day, February 2, over and over again.
No matter what he does, the repetitive cycle won’t break. He goes to sleep, wakes up to his alarm, and it’s the morning of Feb 2 again.
Likewise, in The Truman Show, Jim Carrey lives in a simulated environment where everybody’s an actor in a popular TV show except him. For him, it’s his real life. But although he doesn’t realise it, everything around him is completely scripted and fake.
If merge these two movies together, they perfectly describe the world in which we live today. Welcome to Groundhog Day meets The Truman Show. Let’s call this mash-up The Groundhog Show.
In this composite story you, the plucky central character, wake up every day in a world where the same mistakes are made over and over again by our so-called “leaders”.
Take the central banks, for instance. In this show, they continually blow massive credit bubbles over and over again, which then result in widespread, painful losses when they inevitably burst. And the central planners keep doing this without any indication that they’re aware they’re repeating the same mistakes.